City of Providence Admits to Overbilling on Tax Bills

City of Providence Admits to Overbilling on Tax Bills

The City of Providence sent out tax bills to tens of thousands of homeowners overcharging.

The administration of Jorge Elorza now admits an accounting error on the first-quarter tax bills sent out to homeowners, following a contentious budget battle that ultimately resulted in a homestead exemption of 40% for the current fiscal year.

Now, after a number of taxpayers raised the issue with the city that their homestead exemption came out to just less than 40% — meaning that their tax bill in those instances came out to be a dollar or more higher — the city acknowledged that it would be “making the proper adjustments” in the next set of tax bills. 

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The city has approximately 30,000 owner-occupied homes.  The total overbilling is estimated to be between $50,000 and $100,000.

“The City is aware of the issue with the recent property tax bills and is making the proper adjustments. The impact is minimal to individual taxpayers,” said Victor Morente in a statement to GoLocalProv.com.

“Refunds will not be issued but the remaining balances for accounts impacted will be credited and adjusted,” added Morente. “The City is advising all who may need assistance with this matter to reach out directly to the Assessor’s Office at 401-680-5229 or by emailing [email protected]."

In June, at an unprecedented 8 a.m. press conference, the Providence City Council leadership had unveiled a new tax plan with just two-plus weeks in the fiscal year to drastically change the burden to the homeowners of the most expensive homes in the city.

After a contentious back-and-forth between Elorza’s office — which said the new budget was illegal — and City Council leadership, which said the changes were necessary to alleviate the drastic increase in home values in certain sections of the city in the latest revaluation which resulted in higher tax bills for lower-income residents, the council ultimately slashed millions off of Elorza’s budget and instituted a 40% homestead exemption across the board. 

Accounting Issue Addressed

Providence resident Ginny Pires said that when she got her tax bill for her home valued at $379,200, she did the math when the homestead exemption was listed at $151,617 — or 39.983386%.

Pires said that recalculated for 40%, the homestead exemption should have been $151,680.

As a result — Pires, who has an elderly exemption of $511.14 — saw that what the city billed her $5,589.44 in taxes should have been $5,587.89.

“The difference between what the city was allowing as an exemption was only $63 less than what a 40% exemption would be; less exemption, more tax.  It wasn’t the dollar difference that bothered me, but the principle that the bill stated the exemption was 40%.  That’s what motivated me to go to the Providence Tax Assessor’s office to have my bill corrected, or at least get an explanation as to why there was a discrepancy,” wrote Pires. 

“I told the employee of the discrepancy, and was given a 40% exemption with the difference applied to my tax due as a credit in the 1st quarter.  The employee was very courteous and responsive to my concern.  I then told my neighbor about this experience.  He later told me that he also did not receive the stated 40% homestead exemption.  Perhaps there are others...who should check the math on your owner-occupied residential tax bill before you make the 1st quarterly payment,” said Pires. 

“The employee told me that the reason for the discrepancy was a “computer glitch” so that the quarterly payment would come out even.  I doubted that to be true, but didn’t challenge her on it,” said Pires. The difference on my bill was $1.55.  You only need a nickel difference or less to be able to divide by 4, and either come out even, or pay a penny more in 1 or more quarterly payments.”